I recently helped negotiate an employment contract for a new hire at a portfolio company. It was clear from the very beginning that this new VP of Marketing was the right fit for the company and that the chemistry was there. Both sides were excited about moving forward until we got to the employment contract. In theory, we were in general agreement on salary range, bonus, etc. but what ended up scaring us was the fact that every issue, big or small, was negotiated to the nth degree. There was no give from the other side and when issues such as vacation days were hotly contested, I got quite concerned. In the end we passed on the candidate. We reasoned that if he was this difficult during a negotiation for his contract that he would be just as difficult to work with. I am not sure if he relied on his lawyer too much or if it was just his style, but either way negotiating every nickel and dime is not how to get deals done. I felt that the basic element of trust was never established in the negotiation.
My only words of wisdom for you is that In any negotiation, make sure you mark down your most important points and put them in a bucket. Place the less important deal points in another bucket. Try to put yourself in the company’s shoes to understand their major points as well. I encourage you to ask for everything but at the end of the day be smart about what you really want-try to win on the big points but don’t be afraid to give in on the small issues. At the end of the day, nickels and dimes do not add up.
Surely there must have been some clues long before the final “nickel that broke the camel’s back.”
Going forward, maybe there are some little “tests” or indicators that could be thrown into the early discussions to sense the right mix of toughness and flexibility that the position requires.
Or maybe the real problem was that the interviewing team allowed the candidate to place himself in too strong a position of control early in the game and then the so-called nickel and dime difficulties where simply a confusion resulting from poor signaling upfront from your side.
Just be thankful that the guy wasn’t smart enough to sense that if he let a few nickels slip through his hands then he would really be in control. And hope that the next guy isn’t reading your blog post.
A lawyer once told me some advice his father had given him: “I never met a con man I didn’t like.” Hopefully that’s not relevant to your near-disaster, but who knows.
— Jack Krupansky
The argument could be applied both ways, couldn’t it ? If the candidate is truly good and could potentially contribute a lot to the company, couldn’t the company show some flexibility ? Is the nickel-and-diming argument applicable to both sides in this case ?
This is especially true if he/she had multiple opportunities…
On the other hand, many times a company will try to take advantage of an employee. I’ve been involved in salary negotiations where the company needs a particular employee very badly, but then lies to her about everything from their profits to what comparable employees are being paid so that they can try to get the new employee at a lower salary.
Like the last post, there seems to be a disturbing tendency here to call for unilateral “compromise”.
Fair points by all. Each situation is different. I guess I was a little frustrated because we moved on all of the large points and the candidate kept pressing on small ones. There was no “give and take” but only take. Yes, the nickels and dimes go both ways but everyone must remember that a negotiation is “give and take” and that it is important to understand and prioritize what you really need to have versus what is nice to have.
I’ve had this come up when it is someone who has worked for the same company for a long period of time, is leaving a larger ogranization for a start up or is just basically looks and talks like a risk taker but really isn’t. Doesn’t sound like he had effective career coaching on the other side.
I’d say you averted disaster, as I’d guess you need someone who can live a little on the edge in one of your portfolio companies.
Negotiating vacation days would be a huge red flag to me. In a young growth company, nobody should be thinking of vacation days. If you really are committed and love what you are doing, why would you even consider a vacation?
I have been in cases where all my cases (3) were correct, but the other party wanted to not give atleast one. And there was no one, so this was not a saving face episode. Guess, one should just put a larger list and say here, I will take 3 and you get these 2.
In Negotiations never are not hard rules, so silly win-win scenarios. One just goes with their guts at the end.
On the other hand, you too seem to have regrets too, less it won’t be worth a revisit, much less a blog entry.
Good to read the other POV.
Amit
John:
Your comment about “If you really are committed and love what you are doing, why would you even consider a vacation?” is so five years ago it is laughable.
Clearly this candidate was misguided, but your response is the inverse match of that extreme.
Joe,
I appreciate the ad hominem remark.
Five years ago or not, I am building my company in just that manner. All of our people have the flexibility to take time off as they need it but no one brought up taking time off as a major negotiating point.
If a candidate “hotly contests” vacation days with me, he is gone – period. You can call it what you will. I am flexible on vacation but there are too many strong candidates out there that I do not have to “hotly contest” vacation days.
John
John: On that we can agree. I just thought your earlier remark about “why would you even consider a vacation” was extreme. Good luck in your endeavors. — Joe
Admittedly a ton of details are amis and negotiations will fail for any number of reasons … but it is _always_ a failure of _both_ sides.
Candidate was, IMHO, wisely negotiating his worth.
Company was, IMHO, prudently excercising commitment caution.
End result appears to be an unfortunate event for both sides.
Alas, if you must blame someone … go ahead and blame me. 😉
What real businesses with less than 100 employees have employment contracts? The amount of money and time it takes to do one of these is a waste for a small company.
Sometimes there is not a deal point.
(Sometimes your deal point doesn’t overlap with theirs.)